Is Google Slowing Down?

Is Yahoo going on the ascendant? SearchIgnite's dollar spending report on the search engine ad market in the US suggests that.

The verdict is not out yet, but if the findings of a study conducted by SearchIgnite, a search advertising technology firm, be taken at face value, Google definitely hit a pothole in the United States. Google lost some points to Yahoo during the first quarter in the US. Search advertisers spent more for the first time on Yahoo and as a result, Yahoo in Q1 grew by 57%. Google adspend grow only half that number. At the end of the first quarter, Google's total market share in terms of ad dollars stands at 70.4 per cent down from 74.5 per cent and Yahoo increased marginally to 24.2 per cent. At the end of 2007's fourth quarter this figure stood at 19.6 per cent. Microsoft's goes down to 5.4 percent, again a slight decrease.

SearchIgnite is a leading provider of search and auction based media optimization technology, managing more than $300 million in paid search annually. This report is the latest in a series of quarterly reports released by SearchIgnite that tracks results across the engines. This report tracked more than 22 billion impressions and 391 million clicks on Yahoo, Google, and MSN from January 1, 2006 through March 31, 2008 across more than 500 marketers, all of whom are clients of SearchIgnite directly or via its sister company 360i.

This report assumes significance, because of the prevailing recession and fears that it will impede if not halt Google's high growth trajectory. These fears so far appear unfounded, but analysts are keeping an open mind and a more open eye on the market. Also, this report comes against the backdrop of the maneuvers by Microsoft's widely publicized attempts at a takeover of Yahoo. Jerry Yang has maintained that Microsoft's has undervalued Yahoo in its bidding campaign might gain currency if the report's findings are accepted. If Yahoo manages to show increase in its growth, it would help Jerry Yang negotiate a better deal from Microsoft provided the takeover actually happens.

Roger Barnette, president of SearchIgnite said,

" If these numbers are an accurate reflection of the market, it could lead Yahoo to surpass expectations."

He though also added that, 2007 and its first quarter was a low growth period for Yahoo as it launched its new search advertising system, so against those figures, this years figures could seem exponentially high. Yahoo will come out with its earnings report on April 22nd.

The jury therefore is still out. The United States market is only a single slice in the pie of Google. So, a slow growth in America can in effect be easily made up by the other markets such as Europe. Despite the findings, these are early days yet.